Norway's DNB, Sparebank 1 agree $2.4 billion insurance merger

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OSLO (Reuters) - Norway’s DNB (DNB.OL) and the Sparebank 1 consortium of banks have agreed to merge their insurance operations in a jointly owned company valued at 19.75 billion Norwegian crowns ($2.43 billion), the companies said on Monday.

The deal follows a preliminary agreement struck in June and forms a major competitor to casualty insurers Gjensidige (GJFS.OL), Tryg (TRYG.CO) and Sampo’s (SAMPO.HE) If P&C, and will also compete with life insurer Storebrand (STB.OL).

DNB contributed 20 percent of the new unit’s assets and will buy a 15 percent stake from the other owners, with an option to purchase another 5 percent, potentially taking its stake to 40 percent.

The pro-forma profit after tax for the new company for 2017 was approximately 1.8 billion crowns.

Completion of the deal, which depends on regulatory approval, is tentatively set for Jan. 1, 2019, DNB said.